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Market & Analysis

A 20-year-old crypto market-maker who skipped college breaks down his Reddit-inspired approach to trading – and outlines why he sees ether displacing bitcoin as the ‘king cryptocurrency’

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Matthew Tweed
Matthew Tweed is a 20-year-old crypto market maker.

  • Matthew Tweed runs his crypto firm from his parents’ house in the suburbs outside London.
  • 20-year old Tweed told Insider “around 90%” of the conversations he has about crypto take place on Reddit.
  • He backed ether to eventually displace bitcoin due to its technological advantages.
  • See more stories on Insider’s business page.

Matthew Tweed learnt his first valuable lesson about cryptocurrency six years ago, when he was just 14 years old.

“I got into investing in crypto because I found an interesting token that was meant to be for online marketplaces, and I moved from that to bitcoin,” Tweed told Insider. “I can’t remember what the project was called – it didn’t go anywhere, but that showed me that there’s a lot of cool projects, but a lot of projects won’t end up working out.”

Tweed now runs his low-latency trading firm, Pine Financial, from his family home in Woking, a medium-sized commuter town, 25 minutes from London. He believes 100% annualized gains are possible in that area of cryptocurrency trading.

Low-latency, or market-making, trading refers to the use of algorithmic trading to increase profitability. Tweed’s bots execute trades on crypto exchanges like Deribit.

“I managed to get into the market-making space without eight figures behind me, but it’s not very accessible,” Tweed said. “You have to put in a lot of time to become competitive.”

Tweed has spent a significant amount of that time on Reddit. He said his first break in market-making trading came from an interaction with another user on the social networking site.

“At the very end of 2018, I got into low-latency trading,” he said. “That came from someone I met on Reddit – to be honest, 90% of what I’ve done and the people that I’ve met has come from the various sub-reddits on algo-trading.”

“I frequent r/algotrading for a lot of my work,” Tweed added, referring to a Reddit forum with 1.2 million users that focuses on quantitative trading and automated strategies. “The specific subreddits are good, but places like r/cryptocurrency don’t have much good content, so I barely look at it.”

Tweed embarked on a career in algorithmic trading just as his classmates were beginning to apply to college. For him, a formal education had limited appeal, given his success with cryptocurrency trading.

In terms of which cryptos he likes the most, Tweed said he believes the ethereum network’s superior technological capabilities will enable its ether token to surpass bitcoin.

“Ethereum will be far more scalable – that should lead the way for being able to make much better applications, so you can have a proper smart contract based decentralized system,” he said. “You’d never be able to build smart exchanges on top of bitcoin – there’s not a platform for it.”

“Long-term, I think there’s a good chance ethereum will become the king cryptocurrency,” Tweed added.

Ether has been volatile this year, surging from $730 to a peak of almost $4,000, before collapsing to under $2,000 weeks later. The token has risen by around 10% to $3,140 since last week’s implementation of the so-called “London hard fork” upgrade, which initially burned around $8,900 worth of coins per minute.

“I think Ethereum 2.0 is going to be great for scalability in the crypto space,” Tweed said. “Many smart contract platforms claim better scaling than Ethereum, but they’re often extremely centralized, or make other fundamental trade-offs, which defeats the purpose of crypto.”

However, despite his own success as a relative outsider, Tweed said investors need to be careful before throwing themselves into the cryptocurrency space.

“Cryptocurrency is fairly small and specialist – I wouldn’t recommend people just throw money at it,” he said. “There’s a lot of ways that retail investors can lose money.”

“There’s a need for regulators to have knowledge of the industry, but in general, I’m in favor of exchange regulation, risk disclosures, and education to protect retail investors,” he added.

Tweed pointed to ‘sh*tcoins’, such as the highly volatile dogecoin, as an example of an area where retail investors could potentially lose money without tighter regulation.

“[Sh*tcoins] are amusing, and I enjoy watching them, but I wouldn’t invest in them or hold them,” he said. “The price may go up in the short-term, but there’s no reason it would in the long-term. In the short-term it’s just supply and demand – people jumping on the meme-coin.”

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Litecoin

Bitcoin, ether, dogecoin prices surge. Check latest rates

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Cryptocurrency prices today surged with Bitcoin surging nearly 3% to $39,267 while the second-biggest cryptocurrency after Bitcoin, ether was up more than 6% to $2,677, as per CoinDesk. Over the past 24 hours, the digital currency Ether climbed to its highest level in nearly two months during the midst of a software upgrade that will trim the pace at which fresh tokens are minted. Still, Ether is well off its record highs.

In some ways, the optimism about the upgrade, known as London or EIP-1559, resembles the hoopla surrounding past reductions in the block rewards for Bitcoin miners. While so-called halvings were planned events, Bitcoin typically rallied in anticipation that demand would either remain steady or increase while the pace of issuance slowed, reported Bloomberg.

Dogecoin, on the other hand, rose over 1% to $0.19 whereas other cryptocurrencies like Cardano, Stellar, XRP, Litecoin also surged over the last 24 hours.

A lot of crypto investors took advantage of the recent spike in bitcoin and booked profits worth $2.09 billion last week, suggesting that there is a belief that the recent spike in the world’s biggest cryptocurrency was only a bearish relief rally.

According to a note by blockchain data provider Glassnode, after an extended period of very negative sentiment, and sustained downwards price action, bitcoin traded high with gusto last week. “A key question is whether this is a disbelief rally (where everyone doubts the new bull trend), or simply a bearish relief rally in a larger time-frame downtrend,” Glassnode said in a note.

Separately, Cryptocurrency investment products and funds posted outflows for a fourth consecutive week, the bulk of which came from bitcoin products, which also experienced its fourth straight weekly outflow, data from digital asset manager CoinShares showed as reported by Reuters.

(With inputs from agencies)

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Litecoin

Cryptocurrency prices today: Bitcoin, Ether fall as virtual coin market sees profit booking

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Cryptocurrency prices weakened on Tuesday as the virtual coin market saw increased profit-booking by investors. However, analysts suggest that the consolidation is minor and virtual coin markets will not witness a major impact due to it.

Bitcoin, the world’s most popular cryptocurrency was trading at $38,582.30, down over 2.5 per cent at 2:05 pm. Bitcoin’s market capitalisation fell sharply to $724.36 billion.

Meanwhile, Ether fell over 3.5 per cent to trade at $2,487. The second-most popular virtual coin’s market capitalisation fell to $290.85 billion. Most other popular cryptocurrencies fell including XRP, Cardano, Dogecoin, Polkadot and Litecoin.

Cryptocurrency highlights | Check yesterday’s prices

CRYPTO OUTFLOWS FOR 4 WEEKS IN A ROW

The cryptocurrency market has witnessed a sharp recovery over the past two weeks but encountered outflows for the fourth consecutive week. A bulk of the outflows came from Bitcoin products, suggests data from digital asset manager CoinShares.

Cryptocurrency outflows hit $19.5 million the week ended July 30, with Bitcoin reaching $19.7 million in outflows. However, some virtual coins such as XRP and Polkadot saw minor inflows during the week.

Commenting on the weakness, Edul Patel, CEO and Co-founder of Mudrex, a global algorithm based crypto trading platform, said, “The cryptocurrency markets consolidated over the past 24 hours. Most of the major cryptos saw some profit booking.”

“After 12 successive green candles, ETH declined by around 4.2%. It is still a minor profit booking and not a selloff as the traded volumes have remained constant over the past 24 hours,” he added.

“Such consolidations help the market to eliminate the bad actors. We can expect the markets to remain under some pressure over the week.”

Here are the latest prices and trends of popular cryptocurrencies:

Cryptocurrency

Price (US Dollar)

24-hour change

Market cap (Billion)

Volume (24 Hours)

Bitcoin

38,597.15

-2.50%

$724.64

$28.70 billion

Ether

2,490.44

-3.47%

$291.25

$27.18 billion

Dogecoin

0.197849

-3.64%

$25.83

$1.03 billion

Litecoin

137.71

-4.07%

$9.39

$1.54 billion

XRP

0.714574

-4.11%

$71.45

$3.13 billion

Cardano

1.29

-2.09%

$41.76

$1.12 billion

DISCLAIMER: The cryptocurrency prices have been updated as of 02:25 pm and will change as the day progresses. The list is intended to give a rough idea about popular cryptocurrency trends and be updated daily.

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Bitcoin

Upgrades, ESG, DeFi usage to help ether outpace bitcoin: Pantera Capital

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Representations of cryptocurrencies Bitcoin and Ethereum are placed on PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration

Aug 3 (Reuters) – The Ethereum platform’s potential applications, lower environmental impact and technical upgrades are likely to help the ether token continue to outperform bitcoin, Pantera Capital CEO Dan Morehead said.

As a more recent token, ether has further to run than bitcoin, Morehead told the Reuters Global Markets Forum on Monday, adding that the latest Ethereum Improvement Proposal (EIP) 1559 upgrade will help it trade more like a fixed asset.

“You’ll see a transition of people who want to store wealth, doing it in (ether) rather than just bitcoin,” he added.

Scheduled to go live Wednesday, EIP 1559 significantly changes how transactions are processed on the Ethereum blockchain as well as reduces supply of the ether token. read more

Migration to the upgraded “Ethereum 2.0” will reduce ether’s mining energy use compared with bitcoin’s large carbon footprint, Morehead said.

The blockchain’s use in decentralised finance (DeFi) applications will also support prices, he added.

Ether , the world’s second-largest cryptocurrency, has more than doubled its price in 2021 to its Monday close of $2,608, compared with bitcoin’s rise of 46% to $39,166.

Ether’s market capitalisation was around $306 billion on Monday, less than half of bitcoin’s $737 billion, according to tracker CoinGecko.com.

Morehead sees bitcoin ending 2021 between $80,000 and $90,000, and rising above $120,000 within a year. Increased mainstream adoption could push it as high as $700,000 in the next decade, he said.

Despite recent volatility that left bitcoin 40% below its April all-time high of $64,895, Morehead said Pantera Capital’s funds have attracted institutional investors who are less “momentum”-oriented than retail investors, and see current prices as a buying opportunity.

He also sees increased regulatory scrutiny, such as a global crackdown on cryptocurrency exchange Binance, as a “transition” phase.

Pantera, which manages $2.8 billion in blockchain-related assets, has invested in several crypto exchanges including Bitstamp, Coinbase, (COIN.O), and regional exchanges such as Mexico-based Bitso.

(This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on the Refinitiv Messenger platform. Join GMF: https://refini.tv/33uoFoQ)

Reporting by Lisa Pauline Mattackal and Aaron Saldanha in Bengaluru; Editing by Divya Chowdhury and Jacqueline Wong

Our Standards: The Thomson Reuters Trust Principles.

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Ethereum

Bitstamp CEO says he’s been ‘blown away’ by interest in ether staking as exchanges gear up for ethereum 2.0

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2021 02 19T000000Z_1488177917_RC2YVL93EI8S_RTRMADP_3_CRYPTO CURRENCY ETHEREUM.JPG
Excitement is building around ethereum staking.



  • Bitstamp’s CEO has been “blown away” by the amount of interest in ether staking, he told Insider.
  • Bitstamp is one of many exchanges to have added ether staking, amid excitement around ethereum 2.0.
  • Staking is when users put up tokens to gain the right to validate transactions and earn more crypto.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The CEO of crypto exchange Bitstamp has been “blown away” by the amount of interest in ether staking on the platform, as excitement builds around a sector that JPMorgan believes could be worth $40 billion in five years’ time.

Crypto staking is when users put up their own tokens to gain the right to validate transactions on blockchain networks and earn more cryptocurrency as a reward.

Bitstamp added ethereum staking to its offering in July. The exchange was started in 2011 and is the 11th-biggest.

“We have been … blown away, if that’s the right term, in terms of the amount of interest that has come,” Bitstamp CEO Julian Sawyer told Insider this week. He did not disclose how much had been staked so far, however.

Sawyer said Bitstamp users who were choosing to stake ether – the cryptocurrency of the ethereum network – were on average staking 50% of their holdings.

“That says a lot. That is not people playing [and saying] ‘oh, I’ll just put 1%, 10% over there, I’ll put a hundred dollars into this.’ That is people being engaged in the product set and the interest rate.”

Read more: A crypto research analyst breaks down 3 trades designed to generate 30% to 80% returns – and shares the 2 metrics that make him bullish about a bitcoin comeback

Excitement has built around staking thanks in large part to the ethereum network’s upcoming upgrade, known as the shift to ethereum 2.0.

The network will move from a “proof-of-work” system, where so-called miners use vast amounts of computing power to validate transactions, to a “proof-of-stake” mechanism. Developers hope the switch will be complete by early 2022.

The upgrades could help the staking industry grow to $40 billion by 2025, JPMorgan analysts, led by Kenneth Worthington, said in early July. Worthington and colleagues said exchanges such as Coinbase stand to profit as the sector grows.

More than 6.4 million ether – worth $15.1 billion on Friday – have been staked on ethereum 2.0 network already, according to Etherscan.

However, users who want to stake ether, including on exchanges such as Bitstamp and Coinbase, have to lock up their coins until the upgrade is complete. Ether staking is also unavailable to Bitstamp’s US customers.

Sawyer said the fact that users were willing to lock up their tokens showed how people are increasingly committed to the crypto sector.

The Bitstamp boss, who has run the company since October 2020, also said interest in ether has grown sharply compared with interest in bitcoin. He said this shows people are becoming more interested in other parts of the crypto world.

Although many retail investors are interested in ether staking, one executive at a top crypto exchange said institutional investors were warier due to the lock-up period, during which time the price could swing wildly.

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